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Posts Tagged ‘BOEM’

Methane emissions: Nord Stream > offshore leasing

Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , on February 14, 2023| Leave a Comment »

The Nord Stream sabotage likely released more methane than the complete lifecycle of a GoM lease sale (upstream and downstream). Also, the Nord Stream explosions may have released more methane than is emitted by all US offshore producers in an entire year. Here are the numbers:

Source of MethaneCH4 emissions (1000s of tons)
Nord Stream (probable range)100-400
Nord Stream (maximum)500
Nord Stream – first 48 hrs (CAMS est)175
all US offshore production in 2020 (EPA)193
all US on- and offshore exploration in 2020 (EPA)12
lifecycle upstream emissions from a typical GoM lease sale (BOEM)118
lifecycle up- and downstream emissions from a typical GoM sale (BOEM)151

Finally, remember that offshore oil and gas leasing results in a net reduction in GHG emissions.

The No Leasing scenario results in roughly double the CO2e emissions for upstream activities compared to those of the Leasing scenario, given that, collectively, the substitute energy sources have higher GHG emissions per unit of production (also known as “GHG intensity”) compared to the forgone domestically produced OCS oil and natural gas of the Leasing scenario.

BOEM

Even when mid- and downstream emissions are included, leasing is preferable to no leasing. See the table below from the BOEM report:

Bottom line: we need more energy leasing and less military aggression!

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Standing Committee on Offshore Wind Energy and Fisheries (National Academies)

Posted in energy policy, Offshore Energy - General, Offshore Wind, tagged , , , on February 9, 2023| Leave a Comment »

The National Academies of Sciences, Engineering, and Medicine will establish a standing committee to provide ongoing assistance to the Department of the Interior’s Bureau of Ocean Energy Management (BOEM) in its efforts to manage development of the nation’s offshore wind energy resources and their potential effects on fisheries

NASEM

This seems to be a positive step and the committee members have excellent credentials, but how do you establish such a committee without any representation from the wind industry? Here are the 12 members of the committee.

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GoM oil production and the 5 year leasing plan

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , on January 17, 2023| Leave a Comment »

As is evident from the first table below, the EIA’s new short-term production forecast for the Gulf of Mexico differs significantly from the optimistic BOEM forecast.

The EIA 2022 figure is spot-on, as it should be given that 10 months of 2022 production data are now in hand. However, BOEM’s 2022 forecast (published in July) missed the mark considerably. (In fairness to BOEM staff, their work was probably completed months before publication pending internal reviews.)

Of greater concern, given the policy implications, is the rosy BOEM forecast for the out-years. Despite historically low levels of leasing and exploratory drilling, BOEM forecasts oil production to exceed 2 million BOPD through 2027 and to remain well above the current (2022) level through 2031 (second table below).

As previously noted, the authors of the proposed 5 year OCS leasing plan have used the BOEM forecasts to justify a skeleton leasing plan that is unprecedented in program history. Contrary to the OCS Lands Act’s mandate and EIA projections regarding future oil and gas consumption, the proposed leasing plan not so subtly announces the intention to phase out the offshore oil and gas program.

202220232024
EIA1.751.871.85
BOEM1.8922.0002.013
Notes: (1) forecasts are for average daily production – millions of barrels
(2) actual 2022 production averaged 1.74 million BOPD through Oct.

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7 NJ/NY whale deaths in just over a month

Posted in Offshore Wind, Wind Energy, tagged , , , , on January 14, 2023| Leave a Comment »

OCNJDaily

While it’s unlikely that the whale strandings are the result of pre-construction activities for offshore wind development, greater transparency on the part of the developer and regulators would be helpful:

  • What surveys and other offshore activities are being conducted? Where?
  • What is the timeframe for these activities?
  • Any sightings of distressed whales?
  • Other anomalous observations?

Absent regular activity updates, accusations and protests are likely to continue and intensify.

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New BOEM Director: Liz Klein

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged , , , on January 10, 2023| Leave a Comment »

Liz is an experienced attorney and leader in clean energy, climate change, and environmental law and policy. A member of the Biden-Harris administration since January 20, 2021, Liz has served as Senior Counselor to Secretary Haaland with an emphasis on water policy and climate change resilience. In this role, Liz also served as Chair of the Indian Water Rights Working Group, which manages, negotiates and implements settlements of water rights claims.

Prior to joining the Administration, Liz was Deputy Director of the non-partisan State Energy & Environmental Impact Center at NYU School of Law, which supports state Attorneys General addressing clean energy, climate, and environmental initiatives of regional and national importance. President Biden is the third President under which Liz has served at Interior, having worked for both the Clinton and Obama administrations. Under Secretaries Ken Salazar and Sally Jewell, Liz served as Interior’s Associate Deputy Secretary as well as Principal Deputy Assistant Secretary in the Office of Policy, Management and Budget. She was a key architect of the Obama Administration’s work to create a new offshore wind industry and leasing program.

DOI

Congratulations to Ms. Klein on being appointed to lead the Bureau of Ocean Energy Management. In addition to her commendable support for offshore wind energy, I trust that she appreciates the national importance of the OCS oil and gas program and the need for regular lease sales.

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Today’s Cook Inlet lease sale; some levity on a sad day

Posted in Alaska, Offshore Energy - General, tagged , , , on December 30, 2022| Leave a Comment »

Did they write this news release with a straight face? Almost a shutout (could still be if the only bid is rejected). And they need 3 hours to process the results! 😉

That said, good for Hilcorp! They have a vision, and I hope they are successful.

As directed by the Inflation Reduction Act (IRA) of 2022, BOEM held Cook Inlet OCS Oil & Gas Lease Sale 258 on Friday, Dec. 30. 

The reading of the bids was conducted via livestream. The lease sale is now concluded. One bid was received on one block. The bid, in the amount of $63,983, was submitted by Hilcorp Alaska LLC.

Final sale results are currently being processed and will be posted to this page by 1 p.m. Alaska Time.

Following today’s sale, there will be a 90-day evaluation process to ensure the public receives fair market value before a lease is awarded, and a Department of Justice review of antitrust considerations. If a lease is awarded it will be posted to BOEM’s website when the review process is completed.

BOEM

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Gulf of Mexico incidents and violations leader wants to develop a carbon sequestration hub

Posted in accidents, CCS, decommissioning, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , , , on December 28, 2022| Leave a Comment »

Carbon-Zero US LLC of Dallas (a Cox Oil affiliate) has applied for up to $12 million in U.S. Department of Energy funds to develop a pilot sequestration hub in offshore storage fields about 20 miles from Grand Isle, according to officials from Cox Operating LLC, the Dallas operator that owns some of the storage fields.

Cox Operating LLC will “repurpose facilities and equipment” for the carbon storage project, according to a news release.

The Advocate

Should this company be authorized to repurpose Gulf of Mexico facilities for carbon sequestration?

  • Per BSEE Incident of Non-Compliance (INC) data for 2022, Cox had more component shut-in INCs (132) than any other company. Cox was second to the Fieldwood companies in the number of warning and facility shut-in INCs, and in the total number of INCs. 48% of the Cox INCs required either a component or facility shut-in.
  • Cox had an INC/facility-inspection ratio of 0.77, nearly 50% higher than the GoM average of 0.53.
  • Per the posted BSEE district investigation reports for 2022, Cox was responsible for 9 of the 30 incidents that were significant enough to require investigation. That is more than twice as many as any other company (next highest was 4).
  • The incidents included 3 serious injuries, 2 fires, a large gas leak, and oil spills of 114, 129, and 660 gallons. Per the posted reports, only one other company had an oil spill of >1 bbl. (Note: Only spills of > 1 bbl are routinely investigated by BSEE. One bbl = 42 gallons.)
  • While INCs were issued for only 3 of the 9 Cox incidents, a review of the reports suggests that INCs should have been issued for at least 4 of the other incidents.
  • Cox operates 375 platforms with installation dates as early as 1949. 134 of their platforms are > 50 years old. Only 66 were installed in the last 20 years and only 6 in the last 10 years (most recent December 2014). How will the carbon sequestration plans affect their massive decommissioning obligations?
  • Many of the Cox platforms were assigned by predecessor lessees. Those predecessors can only be held responsible for the decommissioning of facilities they installed, not for more recent wells or platforms and not for facilities that are repurposed for carbon sequestration.

Other more generic issues should be addressed before DOE awards funds for offshore sequestration projects.

Also, as noted in the discussion of Exxon’s 94 Sale 257 oil and gas leases, a competitively issued alternate use RUE is required (30 CFR § 585.1007) before sequestration operations may be conducted on an oil and gas lease.

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Wind sale bidding continues to baffle and amaze

Posted in California, energy policy, Offshore Wind, tagged , on December 7, 2022| Leave a Comment »

California offshore wind sale: 5 leases, $757.1 million in high bids

The California wind sale bidding, while lower than the record Atlantic sale in February, was extraordinary given that the 5 leases are relatively distant from shore (20+ miles) and in water depths (537 to 1284 m) that dictate the use of floating turbines. Generous subsidies, credits, and State mandates no doubt contributed to the seemingly inflated bidding, as did an auction system that is designed to maximize bonus payments.

Given the slow progress in US offshore wind development, the setbacks the industry is experiencing, the added challenges associated with commercial deepwater development, the potential cost burden on taxpayers and power customers, and the government’s financial and policy support, a more development-friendly leasing system would seem to be prudent. BOEM took a step in that direction with the with the limited training and supply chain credits provided for in the Sale Notice, but fundamental changes in the auction system may be desirable.

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Interesting twist in Tuesday’s (Dec. 6) Pacific wind lease sale

Posted in California, energy policy, Offshore Wind, tagged , , , on December 5, 2022| Leave a Comment »

As a result of a provision in the Inflation Reduction Act, leases may be sold but not awarded. See the paragraph below that was inserted at the end of the sale notice. No wind leases may be issued until Sale 259 oil and gas leases are issued (presumably late next spring).

XV. Compliance With the Inflation Reduction Act (Pub. L. 117-169 (Aug. 16, 2022)(Hereinafter, the “IRA”):

Section 50265(b)(2) of the IRA provides that “[d]uring the 10-year period beginning on the date of enactment of this Act . . . the Secretary may not issue a lease for offshore wind development under section 8(p)(1)(C) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(p)(1)(C)) unless— (A) an offshore lease sale has been held during the 1-year period ending on the date of the issuance of the lease for offshore wind development; and (B) the sum total of acres offered for lease in offshore lease sales during the 1-year period ending on the date of the issuance of the lease for offshore wind development is not less than 60,000,000 acres.” Section 50264(d) of the IRA provides that “. . . not later than March 31, 2023, the Secretary shall conduct Lease Sale 259[.]” Conducting Lease Sale 259 is needed for BOEM to satisfy the requirements in section 50265(b)(2) of the IRA and issue the leases resulting from this lease sale. Notwithstanding the foregoing, nothing in the IRA prevents BOEM from holding this auction.

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What’s next for Exxon’s sequestration leases?

Posted in CCS, Gulf of Mexico, tagged , , , on October 25, 2022| Leave a Comment »

Offshore

Per BOEM’s leasing data base, all 94 of the Sale 257 “carbon sequestration leases” (blue) were issued with an effective date of 10/1/2022. However, Sale 257 was an oil and gas sale, and the leases do not convey carbon sequestration rights. Each lease will expire in 5 years absent oil and gas production or ongoing drilling operations.

These oil and gas leases may not be repurposed for sequestration or other purposes unless an alternate use RUE is issued competitively in accordance with 30 CFR § 585.1007.

So what’s next for these 94 leases, 31% of the entire sale?

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